Australian government bonds are caught in the global fixed income sell-off

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Australian 10-year government bond yields pushed well above 2.6% early in Friday’s Asian trading session, as the shift underway in global fixed income markets continues.

Japanese 10-year government bonds are also selling off, with yields hitting 0.1% for the first time since February.

Overnight, minutes from the European Central Bank’s June meeting showed that the committee members had discussed the potential of monetary stimulus withdrawal.

That sent government bond yields for major European countries to spike by around 10 basis points. Aussie bonds weren’t immune from the sell-off:


Australian 10-years started this morning’s session at 2.64% and a short time ago had risen to 2.66%. At current prices, Australian 10-year bond yields are at their highest level since early May.

The yield on US 10-year treasuries is holding steady at 2.37% after rising by 3 basis points overnight.

German 10-year government bonds are edging higher early in the Asian session, a short time ago up another basis point to 0.57%.

That comes after a huge 10-basis points spike in the bond yields of Germany as well as Italy and France, in the fallout from the ECB minutes.

It brings the yield spread between US and German government bonds down to 180 basis points, its lowest level since November.